Surging investment in data centres brings fire and water supply risks that must be managed from the start through mitigation strategies, commercial property insurer FM warns.

Senior VP and Australia and New Zealand operations manager Andrew Stafford says operational and financial risks must be considered up front, with resilience strategies incorporated at the design stage.

“Businesses need to think about whether data centres are exposed to natural hazards – their fire risk, water supply reliability and power infrastructure,” he said.

Fire causes the highest proportion of gross losses in the data centre industry, and operators must look beyond control rooms to consider risks from gas and liquid leaks, electrical breakdowns and lithium-ion battery run-offs across the site, according to Mr Stafford.

Businesses spent a record $6 billion on equipment and machinery linked to artificial intelligence in the first three months of this year, and Westpac analysis suggests a $155 billion pipeline of projects is yet to come, FM notes.

The data centre surge has raised concerns over water supply security, particularly as the climate warms.

“To avoid increasing water stress, data centres should aim to reduce their use of water by recycling wastewater and putting it back into the cooling system loop,” Mr Stafford said.

“However, the tools for doing this, such as immersion and liquid cooling, which may use intangible and flammable liquids, carry their own risks which need to be evaluated.”